Privatisation Of Power Distribution Not Enough: Panel

After five years of initiation of power sector reforms in Orissa, losses of the privatised distribution companies in the state have crossed Rs 1,000 crore.

According to information available with the power ministry, net worth of these companies is negative and their ability to borrow in the market for capital investment has been eroded though they continue to have access to the state government loans funded by the World Bank.

Further, the state-owned transmission company, Gridco, which is also the monopoly buyer of all power generated in the state, is unable to recover dues from the private distribution companies and is carrying accumulated losses/receivables exceeding Rs 1,500 crore.

This is despite increase in power tariffs four times in the last five years. The State Electricity Regulatory Commission regarded these tariffs as rational and consistent with financial viability provided the private sector distribution companies function efficiently.

Montek Singh Ahluwalia panel, in its initial report on restructuring of the state electricity boards (SEBs), has pointed out that the system in Orissa seemed to be facing impending bankruptcy.